Dangote stakes N10 billion in flour mills’ buy-back deal
To save jobs, targets 900,000 tonnes yearly wheat production
Following a re-acquisition exercise that saw a buy back of 65.7 per cent stake in Dangote Flour Mills, the President of Dangote Group, Aliko Dangote, has staked N10 billion to restructure the firm for profitability, as well as to align with the group’s investments strategy.
Besides, Dangote has unveiled plans to invest in the production of wheat, using the milling firm to drive the agenda, with a target of 900,000 metric tonnes every year.
Dangote also explained that his buy-back strategy is expected to save 3000 jobs that would have been lost due to lack of investments in the mill.
He had sold the company to South Africa’s Tiger Brands in 2012 for $200 million.
However, the South Africans, despite injection of millions of dollars, claimed not to have recovered their investments in the company, which they rebranded in the last quarter of 2015, with Dangote and three other directors resigning from the board.
Speaking at the commissioning of the plant in Kano at the weekend, Dangote assured stakeholders that the mill is back for production and will not be shut for any interest.
“I will like to assure you that we are back for good and we will never close this mill again. It has always been my desire to increase our investments in Kano. We are also looking forward to venturing into farming in the State where we can create a lot of jobs and I think this flour mill will help us achieve this feat in Kano.
“Kano is very strategic because most of our products, be it flour, sugar, pasta, enjoy a lot of patronage and support. I want to announce that we have successfully re-engineered Dangote Flour Mill so as to meet the emerging challenges in the market place and also to meet the ever changing demands of our esteemed and loyal consumers.
“We decided to make this investment in November when Tiger Branded Consumer Goods decided to leave the country and we do not want over 3000 jobs to be lost. You can imagine these 3000 people going back into the job market in Nigeria. So we decided to seek ways to assist to ensure that these jobs are secured by injecting fresh cash of about N10 billion into the business.
“Our return to Kano is actually a sign of good things to come and it is our hope that by this move, we will create thousands of employment in the State and not just in flour but other products.
“Very soon, we will start growing wheat in Kano and I want to assure our customers that we will continue to support them.”
“I am looking forward to you supporting the entire team to make sure the company surpasses its targets of 900,000 metric tonnes of wheat yearly. I want to assure you that with the new board we have, this company will definitely excel with or without my presence”, he added.
Chairman, Dangote Flour Mills Plc, Ighodalo Asue, noted that Kano remains one of the firm’s biggest markets and the management is happy to be reinvigorating the plant.
“We bought back Dangote Flour Mill from Tiger Branded and by this move, it means we have a stronger, better sophisticated and more focused Dangote Flour Mills.
“Since the takeover, we have taken a lot steps to reposition the company through expansion to drive growth. We are also using this medium to restate our commitment to increasing our shareholders value and our dear customers.
Let me assure you that we will continue to invest in the State and other parts of the country and even beyond the country, because we believe in job and wealth creation. It is our hope that our return to Kano will create more job opportunities and impact positively on the economy of the State.
“I will like to commend Aliko Dangote for his investment in Dangote Flour Mills, a few months ago when Tiger Branded Company was going to leave the country, it appears that the fate of the company was in jeaopardy, but Aliko Dangote’s decision to buy back the company has saved the jobs of about 3000 employees and the shares of over a million shareholders. More importantly, the multiplier effect of his investment in the country is immeasurable”, he said.
Group Chief Executive Officer, Dangote Flour Mills, Thabo Mabe, said: “We are using this opportunity to thank our loyal customers and distributors for their patience and understanding during our challenging moments. We have fully repositioned as a company to serve you better and to say we are here for a long hall. We do not only create jobs for people, but provide a lot of incentives to customers to encourage them to grow their businesses so that you can grow our business.
“As our customers, you are critical stakeholders in our business and we will ensure that your needs are fully met. We will continue to count on your support as we also move to grow our market share in the industry.
It is my hope that we continue to impact positively on your business and the entire economy at large”.